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Financial Provisions (Covid-19) (No. 2) Bill 2020: Second Stage (Resumed) (Continued)

Wednesday, 29 July 2020

Dáil Éireann Debate
Vol. 996 No. 2

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(Speaker Continuing)

[Deputy Matt Carthy: Information on Matt Carthy Zoom on Matt Carthy] Many of the businesses depending on such people investing and spending in their local communities or going on a short family break will not get the benefit of this scheme. Those consumers who can avail of the scheme will not be able to get the money back for a full tax year. People who visit a restaurant or stay in a local hotel or a hotel elsewhere in the State next January will not get the rebate for another 12 months. This will not stimulate the economy. In many cases, it will just put money back into the pockets of people who do not need it as much as our carers, those who lost their jobs and those whom I have mentioned.

There is a crucial provision in the legislation that needs to be removed if it is to have an impact on counties such as mine. To avail of the stay and spend package businesses will need to be registered with Fáilte Ireland. This is a crazy requirement. It is absolutely unnecessary and needs to be reversed. Most businesses in County Monaghan are not registered with Fáilte Ireland. Fáilte Ireland hardly knows where County Monaghan is in the first place. Why would businesses hand over €300 to register with Fáilte Ireland when they get absolutely nothing in return? Most of the bed and breakfast accommodation and most of the local restaurants simply are not registered with Fáilte Ireland. It is nonsensical and unacceptable that the provision is being put in place as part of the legislation. It serves no purpose whatsoever other than to give Fáilte Ireland a boost, in other words, it takes money out of businesses that can hardly afford it and puts it in the hands of that agency. It is absolutely unfair and I appeal to the Minister to withdraw this provision from the legislation.

The one area of our economy that does not need to be stimulated is demand in housing. Most young people and families cannot get on to the property ladder because demand is too strong and does not match supply. The help-to-buy scheme will simply pour oil on the fire of the housing crisis we already have. If the Government wants to stimulate housing, it should give local authorities money to build houses. This is how we will stimulate the economy through the construction sector and ensure young families can afford to buy a home. The provision in the scheme will not work.

We always welcome a VAT reduction but the reduction from 23% to 21% will not be felt by consumers because most businesses will have to soak up any saving in this regard. A reduction for the hospitality sector from 13.5% to 9% would have made a real impact. We have tabled an amendment in this regard and I urge the Government to support it.

The very notion of speaking about a stimulus package while removing money from the pockets of those who most need it does not make sense, and to suggest that over the course of this package we will reduce the incomes of people on the pandemic unemployment payment is absolutely crazy. It has austerity at its heart and does not make sense. These are the very people who will spend every cent they get. They will actually support the businesses the Government has not supported in this package. To ensure our economy keeps ticking over and to support those people who need it most, those who have lost their jobs for no reason other than that their employers had to shut down as a result of this pandemic need support. I urge the Government to reconsider.

Deputy Martin Browne: Information on Martin Browne Zoom on Martin Browne The Bill falls short of what many businesses in Tipperary have told me they need. A key requirement for the businesses to which I have spoken is for a stimulus package that would not get them into further debt. Non-debt funding is also needed for the many leisure centres throughout the county, particularly in Thurles and Roscrea, which contribute to the community's physical and mental health and which face financial challenge because of the cost of having to close and the expected reduced footfall.

The Bill falls short of what is needed. We have done the sums and found the overall package equates to a ratio between debt and grants of 4:1. This ratio favours the financial institutions more than it does the businesses. The Government has given many businesses little choice but to continue to struggle along because they cannot afford to access finance that is only available through further debt. Sinn Féin told the Minister that grant assistance was a vital resource for many of the businesses but he chose not to heed our call. A grant package of €1.7 billion was what we called for, which would be in line with Germany and elsewhere, but the Government decided that businesses must get themselves more indebted. This will make some of them even more vulnerable to failure when faced with the challenges coming down the road.

A grant package was something the tourism industry in particular appealed for, given that many in the sector cannot avail of the restart grant. While it was extended to other sectors and the rates available were increased, it was not made available to those who could not qualify in the first round because of their turnover rates in the past. It is also likely the grant scheme will run out before many of the businesses that want to avail of it will be able to do so.

I also want to talk about debt warehousing. The Bill provides for the warehousing of PAYE and VAT debts for businesses severely impacted by Covid-19, which have experienced a significant drop in turnover and have been unable to pay their liabilities in part or in full. While there are businesses that will definitely make use of this, there is one particular provision that may prove counterproductive for some. It is the provision whereby no interest will be charged on the tax debts for the initial restricted trading period of 12 months. Thereafter, a 3% per annum interest rate will apply. This is likely to be problematic for businesses that may not have got back up on their feet at that stage but nonetheless will be faced with an increase in their repayments. Can this not be rethought, given that the impact on some businesses is more severe than on others? We must think of those who, because of the restrictions and guidelines, will be the last to open and may have incurred greater liabilities in that time.

Let us talk about the poor version of Sinn Féin's staycation voucher, the stay and spend initiative. We proposed a proper and more equitable voucher system but the Minister opted for the measure that excludes the least well-off, such as the unemployed, those without taxable employment and carers. Before the Minister seeks to refute this, he should allow me to quote from the briefing document, which states that to benefit from the scheme an individual will need to have an income tax or USC liability against which the tax credit can be set. This excludes many people, particularly those who have the least and are most in need of a break and who more than likely were particularly affected by the lockdown. It is also useless for many others.

While a reduction in VAT is a welcome initiative, what was needed by the domestic sector was a reduction from 13.5% to 9%. The Minister should not claim the stay and spend initiative will make up for this because it will not, given that it is time limited until the end of April next year. Surely a more prolonged period of support is needed for the hotel and hospitality sector. While the measures in the Bill constitute a litany of missed opportunities, the Minister did not miss the opportunity to start with those in need of State supports through the pandemic unemployment payment. People are already experiencing a cut in their payments and further cuts are on the way.

I raise the challenges confronting our musicians and those involved in the arts and entertainment industries. They have told me that what they need at this stage is a survival package and not the stimulus package. A survey by the Music and Entertainment Association of Ireland found that 31.6% of respondents had their pandemic unemployment payment reduced and are now struggling to get by. They need the payment to be restored in full. Many are behind in utility bills and in danger of losing their vans and cars and are experiencing considerable financial stress. Some are in danger of losing their home. What does the Bill do for them? What will the Minister do for them?

The Government needs a few words of advice. Instead of fleecing financial victims of the crisis at the airport while at the same time awarding Ministers handsomely, it should understand it is supposed to work for the people out there and act accordingly. It has missed yet another opportunity to make things better.

Deputy Ruairí Ó Murchú: Information on Ruairí Ó Murchú Zoom on Ruairí Ó Murchú An awful lot has been said. We welcome some parts of these proposals. Obviously, we need to get as much stimulus as possible into the economy, which has been absolutely hammered. As has already been said by many previous speakers, it is very difficult to look at a stimulus programme while dealing with reduced pandemic unemployment payments. The pandemic unemployment payment and the temporary wage subsidy scheme were spoken about initially as necessities to facilitate people to make the best decisions with regard to health options. The deciding factor was that these schemes would also provide a stimulus in the economy and ensure people could pay bills such as rent. They would put money into local shops and butchers and other businesses that were still open and needed to operate. In some sense, we are speaking about a stimulus programme at the same time as we are pursuing austerity and regressive policies.

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